Sat | Dec 10, 2016

Credit union chases car buyers with 10-year loan

Published:Sunday | February 15, 2015 | 12:00 AM
File General Manager of C&WJ Cooperative Credit Union Limited, Barrington Whyte.

The Community and Workers of Jamaica Cooperative Credit Union Limited (C&WJCCU) has rolled out a 10-year car loan, which General Manager Barrington Whyte says is targeted at buyers who want new cars.

The repayment period, which appears to be the longest term on the market, is meant as a hook for buyers of 'new' cars, who are also being offered 100 per cent financing.

Jamaica's auto market comprises a vibrant 'used car' sector, which is largely separate from dealerships that distribute new vehicles. Other lenders are known to offer car loans on terms ranging up to seven years.

C&WJCCU, with J$7.6 billion in assets as at December 2014, has some $2 billion in funds currently available for lending, said White.

"Through our mergers, we are in a very liquid position. So we have resources to on-lend. We have in excess of $2 billion in liquidity. We can support a lending programme," he said.

Westmoreland Cooperative Credit Union merged with C&WJ Co-operative on August 1, 2013. The credit union's total loan portfolio grew to $4.2 billion under the merger, while total savings is in excess of $6.5 billion, Whyte said.

Car loans account for about 70 per cent of the credit union's loan book.

"Year over year, our loan portfolio has been maintained," White said. "You have to understand that a loan portfolio is affected by retainment, and almost 20 per cent of loans are repaid each year. You have to lend enough to cover that and to grow the portfolio," he said.

The 10-year offer is part of the credit union's "more aggressive" strategy to go after new business.

"This year, we intend to be more aggressive. Last year was about consolidation," said the GM.

C&WJCCU has 14 branches spread across Jamaica, which Whyte said would continue to be upgraded to unify customer service across the network. The current focus is on the Negril, Savanna-la-Mar and Montego Bay branches.

The Savanna-la-Mar branch is also being expanded.

The new 10-year car loan is priced at 10 per cent per annum. C&WJCCU is also offering free loan protection insurance, the option to save as one borrows, online pre-qualification, no early repayment penalty, and "low processing fees and fast approvals".

Whyte said he expects that many of the loans would be repaid before the ten year payment period runs out.

"People would not normally keep their cars for ten years in any case. They would normally sell their cars before ten years is up, so from that perspective the loan will be repaid before ten years," said the credit union boss.

"It helps the process of renewal and takes care of any risk attached to the length of the loan," he said.

avia.collinder@gleanerjm.com